Smugglers use bizarre ways to get around India’s obstacle course of gold imports

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The Indian government has raised import taxes on gold three times over the last year; it’s now at a double-digit 10%. It’s also now mandatory for importers of gold to eventually export 20% of what they have imported, a measure designed to narrow down the yawning current-account deficit.

Further, to get around tariffs, Indians continued to import gold illegally. The World Gold Council estimates that India illegally imported about 200 metric tons of gold last year, a total worth of $9 billion. But just as shocking are all the innovative ways smugglers are using to get the stuff in. Here are a few that raised our eyebrows:

Some flights continue to travel domestically within India after arriving from overseas. Domestic travelers can freely travel with gold within India, while international travelers cannot. Further, smugglers count on nobody checking the bathrooms that thoroughly. One set of smugglers boards the flight on the international route and another set on the domestic, the latter walking away with the consignment.

2) Gold is melted into seed-shaped chips and hidden in dates.

(Reuters/Muhammad Hamed)

A passenger coming in from Dubai was intercepted at Pune airport with a consignment of dates. Upon examining the dates closely officials found that these dates contained seeds of gold.

During his campaign speeches, Narendra Modi and BJP had criticized the import curbs on gold, arguing it was giving rise to criminal activity. Indeed, most of Mumbai’s mafia dons, who thrived in the 1970s and 1980s when India was a closed economy with restrictions on everything, cut their teeth in gold smuggling. It is widely expected that the new government will relax the restrictions.